Contemporary Issues in Heterodox Economics
Implications for Theory and Policy Action
Arturo Hermann, Simon Mouatt, Arturo Hermann, Simon Mouatt
- 310 pages
- English
- ePUB (mobile friendly)
- Available on iOS & Android
Contemporary Issues in Heterodox Economics
Implications for Theory and Policy Action
Arturo Hermann, Simon Mouatt, Arturo Hermann, Simon Mouatt
About This Book
Heterodox economics can provide a more complete and robust explanation of economic realities than orthodox (or mainstream) economics. Contemporary Issues in Heterodox Economics: Implications for Theory and Policy Action argues that this greater explanatory power gives heterodox economics the ability to illuminate appropriate policy for the major crises of our time, as well as proffer the basis for a more rounded, pluralist approach to economic theory.
The chapters in this wide-ranging volume address some of the key issues facing the global economy, including the growing disparity of income/wealth between persons and economic areas, environmental degradation, issues associated with employment, and the regularity of economic/financial crises. The authors examine potential policy responses such as modern monetary theory, models of public ownership, and the need to move beyond standard concepts of growth. They also explore the deficiencies of orthodox economics, and contend that a more pluralist approach to economics is required in the public sphere, in academia, and in the classroom in order to help face the challenges of the twenty-first century.
This book is invaluable reading for students and scholars across the social sciences who are interested in alternatives to mainstream economic thinking.
Frequently asked questions
Information
1
Dynamics versus statics
On the nature of heterodox and orthodox economics
Introduction
Scientific and vulgar economics: The case of Walras and Pareto
The Marginalists appropriated the mathematical formalisms of mid-nineteenth-century energy physics, which for convenience we shall refer to as ‘proto-energetics’, made them their own by changing the labels on the variables, and then trumpeted the triumph of a truly ‘scientific economics’. Utility became the analogue of potential energy; the budget constraint became the slightly altered analogue of kinetic energy; and the Marginalists Revolutionaries marched off to do battle with classical, Historicist and Marxian economics.(p. 9)1
to put it bluntly, economics finally attained its objective to become a science through a wholesale appropriation of the mid-nineteenth-century physics of energy … The seemingly simultaneous discovery [of neoclassical theory] was the direct result of the preceding watershed in nineteenth-century physical theory, and the fact that all of the progenitors of neoclassicism were trained in engineering level physics and subject to particular philosophical trends of the time.(pp. 196–197)
this increased dependence on science had a number of perverse side effects. The first was that the more fervent the invocation of science (physics) by political economists, the correspondingly lesser were their efforts in delineating precisely what those methods consisted of, or in finding out what it was that contemporary scientists actually did.(p. 198)
physico-mathematical science of the Elements uses precisely the identical mathematical formulas [as physics]. Walras then proceeded to scold physicists who had expressed scepticism about the application of mathematics to utilitarian social theories on the ground that utility is not a measurable quantum …(p. 220, original emphasis)
thanks to the use of mathematics, this entire theory … rests on no more than a fact of experience, that is on the determination of the quantities of goods which constitute combinations between which the individual is indifferent. The theory of economic science thus acquires the rigor of rational mechanics.(p. 221)
It would have been extraordinary for so many economists to mangle and misrepresent the energy model so frequently without eventually calling down the wrath of physicists upon their labours. Indeed, one of the skeletons in the neoclassical closet is that around the turn of the century, quite a number of physicists turned their attention to this species of upstart proto-energetics and pronounced it wanting.(p. 241)
Time and again they [the neoclassicals] met these inquisitions with hurt, incomprehension, bluster, farrago, protests, the physics was irrelevant, and finally, a feeling of betrayal: How did it come to pass that those in the forefront of trying to make economics a science should be so abused by those whom they were trying to emulate?(p. 241)
Most of his review centred on the thesis that the neglect of mathematical political economy in the French academy had been deserved, because the existing attempts had been devoid of any serious empirical content, not to mention their numerous mathematical and conceptual errors. … Bertrand observed that in general there would exist what in the modern literature is called false trading – namely, some exchanges are conducted at non-equilibrium prices in the process of trying to discover the market-clearing price. Bertrand pointed out, quite correctly...